NFIB Weekly News
Leading the News
Small Business Owners Contend With “Strong Headwinds” Amid Economic “Roller Coaster” (10/26/2021)
NFIB Chief Economist Bill Dunkelberg wrote in Forbes (10/20, Dunkelberg) that “since 2019, the economy has been on a roller coaster growth trip,” but it is now “approaching ‘normal’ and growth is slowing to historically typical rates. But the recovery has not been easy on Main Street. More small business owners predict that their local economy will take longer to return to pre-crisis levels than did so two months ago.” Dunkelberg added, “This squares with the rather pessimistic view owners hold regarding future business conditions overall. Only 10% of small employers expected better business conditions in September, down from 53% in April 2020 and 25% in April 2021.” Owners face “strong headwinds operating their business, including significant staffing shortages, supply chain disruptions, and surging Covid-19 infection rates in some parts of the country.”
In a sponsored article in ColoradoBiz Magazine (10/18), Shawn McGoff head of Commercial, EVP, at Citywide Banks discussed the supply chain issues small businesses are expected to face “for some time,” saying, “it’s time to reassess supply-chain design and ordering practices.” McGoff quoted NFIB Chief Economist Bill Dunkelberg: “As the economy moves into the fourth quarter, small business owners are losing confidence in the strength of future business conditions. The biggest problems facing small employers right now is finding enough labor to meet their demand and for many, managing supply chain disruptions.”
Record Share Of Small Business Owners Report Difficulty Filling Positions (10/19/2021)
Bloomberg (10/12, Pickert) reported, “A record share of small-businesses owners – 51% – said they had vacant positions they could not fill in September, according to data from the National Federation of Independent Business. A record 42% of small firms said they raised compensation, and nearly a third indicated they plan to do so in the next three months.”
NBC News (10/12, White) reported that according to NFIB Research Center Executive Director Holly Wade, “It’s an incredibly difficult time for those who have open positions to find and attract applicants. ... For many of them, they’re not receiving any applications — there are just no résumés coming in right now.” NBC News added, “despite the contraction in job openings, Wade said, the labor shortage remains a cloud hanging over economic recovery. ‘I don’t see that this issue eases any time soon...Small-business owners are planning to have to deal with this well into 2022.’”
Marketplace (10/12, Ryssdal) reported, “There’s a lot of competition for workers, said Holly Wade...because 5 million people still haven’t returned to the labor force.” Wade is quoted saying, “It’s still working out child care disruption issues, school disruption issues, and also for those navigating what their next job that will be.”
Consumer Inflation Continued Sharp Increase In September (10/19/2021)
Bloomberg (10/13, Pickert) reported that “prices paid by U.S. consumers rose in September by more than forecast, resuming a faster pace of growth and underscoring the persistence of inflationary pressures in the economy.” CNBC (10/13, Cox) reported the Department of Labor’s Consumer Price Index “rose 0.4% for the month, compared with the 0.3% Dow Jones estimate.” CNBC added that “on a year-over-year basis, prices increased 5.4% versus the estimate for 5.3% and the highest since January 1991.” CNBC added, “Gasoline prices rose another 1.2% for the month, bringing the annual increase to 42.1%. Fuel oil shot up 3.9%, for a 42.6% year over year surge.” The AP (10/13, Rugaber) reported the core CPI, which excludes volatile food and energy prices, rose 0.2 percent in September and were up 4 percent over the previous year.
The Wall Street Journal (10/13, Guilford, Subscription Publication) reported that according to the National Federation of Independent Business, about 46 percent of small businesses said in September they planned to raise prices in the next three months overall, the most since monthly records began in 1986.
Buttigieg Says Supply Chain Disruptions Could Continue Into Next Year (10/19/2021)
The Hill (10/17, Choi) reported that on CNN’s State Of The Union Sunday, Transportation Secretary Buttigieg “said supply chain issues could continue into next year as many companies struggle with disruptions.” Noting “that Moody’s recently warned that supply chain issues would ‘get worse before they get better,’” host Jake Tapper “asked Buttigieg whether he agreed with that notion and if Americans should prepare for such an outcome.” Buttigieg said, “Well, certainly, a lot of the challenges that we have been experiencing this year will continue into next year. ... But there are both short-term and long-term steps that we can take to do something about it. Look, part of what’s happening isn’t just the supply side. It’s the demand side. Demand is off the charts. Retail sales are through the roof.”
Small Business Optimism Decreased, Uncertainty Increased In September (10/12/2021)
The NFIB Small Business Optimism Index decreased by one point to 99.1 in September. Of the ten Index components, three improved, five declined, and two were unchanged. The NFIB Uncertainty Index increased to 74, a five-point increase, while the proportions of small business owners reporting job openings that could not be filled and increased compensation both hit record highs. NFIB Chief Economist Bill Dunkelberg was quoted saying, “Small business owners are doing their best to meet the needs of customers, but are unable to hire workers or receive the needed supplies and inventories. ... The outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations.”
NFIB Executives Speak Out Against Tax Increase Proposals (10/12/2021)
School For Startups Radio (10/5) featured NFIB President Brad Close, who argued that new tax proposals would undermine small businesses’ ability to offer competitive compensation, in an environment where finding qualified workers remained their biggest problem. Close said, “Right now [Washington D.C. is] trying to decide how they can raise most Americans’ taxes to pay for a huge expansion of government, so we’re doing everything we can to make sure that doesn’t happen…There are plenty of things in this bill that should have most small businesses really worried…There’s a new 3.8% tax…on pass throughs, they’re increasing some rates – capital gains rates. They want to lower the death tax threshold to make sure more small businesses fall under it.”
Business Climate
NFIB Concerned Paid Leave Push’s Small Business Burden (10/26/2021)
The New York Times (10/18, Ngo) reported that “paid leave...is one of the many proposals at risk of being scaled back or left out of an expansive social safety net bill that Democrats are trying to push through Congress.” The Times said, “While larger businesses have grown open to a paid leave program, some small business groups have pushed back against a federal mandate. Holly S. Wade, the executive director of the research center at the National Federation of Independent Business, said the group was concerned that a paid leave program would burden small employers since it would require more administrative reporting.” Wade was quoted saying, “While covering the cost of some of these mandates could potentially be helpful, in the way that an owner sees it, it just comes with a lot of paperwork, a lot of confusion and a lot of challenges.”
Despite Termination Of PPP, Small Businesses Can Still Apply For Federal Assistance As Pandemic Persists (10/26/2021)
The AP (10/21, Kriss) reported, “The federal government’s Paycheck Protection Program provided small-business owners with just under $800 billion in COVID-19 relief, according to the U.S. Small Business Administration.” The program ended “on May 31, but as businesses forge ahead in the recovery process, they may find a continued need for affordable financing.” The piece also discusses other federal programs that can provide assistance to businesses in need.
Fed Chair Acknowledges Inflation Is “Running Well Above Target” (10/26/2021)
The New York Times (10/22, Smialek) reported that Fed Chair Jerome Powell, speaking at a virtual Bank for International Settlements-South African Reserve Bank conference on Friday, indicated that “the pandemic-related shortages that are pushing consumer prices higher are poised to last longer than economists and policymakers had expected...adding that officials still expect the rate of inflation to moderate, but the central bank needs to be in a position to react if it does not.” Powell said, “Overall inflation is running well above target,” and supply shortages are “likely to last longer than previously expected, likely well into next year.” Powell added, “In the meantime, the risk is that high inflation will begin to lead price and wage setters to expect unduly high rates” of inflation.
Fed Report Says Economy Faces Headwinds But Consumer Spending Remains Positive (10/26/2021)
The AP (10/20, Crutsinger) reported the Federal Reserve reports in its latest “beige book” report on business conditions around the country “that the economy faced a number of headwinds at the start of this month, ranging from supply-chain disruptions and labor shortages to uncertainty about the delta variant of COVID.” The Fed “said Wednesday that a majority of its 12 regions viewed consumer spending, the main driving force for the economy, as remaining positive despite the various speed bumps.” But, the report “noted wide differences in performance. ... It noted that auto sales suffered because of constrained inventories due to problems obtaining critical semiconductor components. Manufacturing, meanwhile, was growing either moderately or robustly depending on which Fed district was reporting.” The Wall Street Journal (10/20, Subscription Publication) said many business said they anticipate that higher prices and supply shortages to continue for another year.
SBA Administrator Discusses EIDL Changes And Streamlining (10/19/2021)
The Chicago Business Journal (10/13) reported the SBA “continues to look at ways to make its Economic Injury Disaster Loan application process easier,” according to “remarks came Wednesday during the Society for Advancing Business Editing and Writing conference” from SBA Administrator Isabel Casillas Guzman, who “weigh[ed] in on the agency’s Covid-19 disaster relief programs, problems facing small business owners and the administration’s efforts to tackle those issues.” The Administrator “pointed to changes the SBA made to the loans, including expanding how the proceeds can be used, and how the SBA cleared a backlog of loan applications over the summer,” and also “stressed the SBA had recently raised the limit on those loans from $500,000 to $2 million.” Even so, she said, “The SBA wants to continue to streamline and continue to make the loans more accessible. We are looking at further ways to improve the process.”
Summers Is “More Alarmed” By “Widespread” Inflation (10/19/2021)
Bloomberg (10/15, Kennedy) reported former Treasury Secretary Larry Summers is “urg[ing] a faster wind-down of the Federal Reserve’s $120 billion a month bond-buying program, given evidence of persistently high inflation. ‘We see inflation becoming more widespread in a wider range of products, spreading to the housing and labor markets,’ Summers told Bloomberg Television’s ‘Wall Street Week’ with David Westin.” Summers added, “I’ve been alarmed for a long time and I’m more alarmed now.” The Wall Street Journal (10/15, Hannon, Dube, Yifan Xie, Subscription Publication) reported inflation is rising globally, but so far the Federal Reserve and the European Central Bank have not raised interest rates, unlike some other central banks.
Small Business Marketing
Use Of Data For Analytics, Advertising Falls Under California Privacy Law (10/26/2021)
In an AdExchanger (10/22, Miller) op-ed, Rachel Miller, director of marketing communications at Permission.io, said California Attorney General Rob Bonta recently clarified the scope of what authorities will consider as a data sale under the California Consumer Privacy Act (CCPA). The letters Bonta sent to tech companies “help clarify one of the CCPA’s most significant ambiguities, which is whether data tracking for the purposes of analytics and advertising, including cookie-based tracking, fall under the CCPA’s definition of a ‘sale.’ The answer is: it does.” The enforcement letters “further clarify that general third-party opt-outs will no longer be sufficient for compliance.”
Instagram Testing Affiliate Shops For Influencers (10/26/2021)
Insider (10/22, Bradley) reported that Instagram’s “affiliate marketing test is expanding with a new feature: a shoppable landing page for influencers,” offering a “a platform-native option” for affiliate links. Insider explained that “prior to Instagram testing its own native affiliate program, influencers relied on platforms like LTK or ShopStyle Collective for these links,” but now, “creators with access to the tool will be able to make ‘collections’ of products that are eligible for commission.” Additionally, users can “sort through an influencer’s shop and collections by searching for specific products, or filtering by price or sale items.”
Square, PayPal Face Cost Disclosures For Small Business Loans (10/19/2021)
Bloomberg BNA (10/14) reported, “Soon, merchant cash advance companies as well as prominent fintech lenders like PayPal Inc. and Lending Club Corp. could be required by state authorities to provide far more transparency to small business borrowers.” Regulators in California and New York have “proposed requirements for online lenders to disclose the cost of the financing small business borrowers apply for,” and lawmakers in Connecticut, New Jersey, and North Carolina “have introduced similar legislation.” Some finance providers, including PayPal, Square, and Stripe, “as well as merchant cash advance companies, worry their products could be at a disadvantage – real or perceived – depending on the disclosure metrics states want to put in place.”
SBA Assistant Administrator Explains “How Emprendedoras Are Changing American Small Business” (10/19/2021)
In a piece for Inc. Magazine (10/15), SBA Assistant Administrator Natalie Madeira Cofield said with Hispanic Heritage Month underway, the SBA was “mindful of the need to elevate underserved communities, which include America’s emprendedoras.” The Office of Women’s Business Ownership (OWBO) was “focused on meeting the needs of these Latina women through advocacy, outreach, education, and support. OWBO’s efforts are particularly relevant as the SBA has delivered $1 trillion to small businesses since the pandemic began, and continued under the watch of Administrator Isabella Casillas Guzman – an emprendedora herself.”
JPMorgan Chase Invests In Underserved Communities In South Florida (10/12/2021)
Potentially behind a paywall, the New York Business Journal (10/4, Garrett) reported, “Miami-based Sunstate Bank will use a multi-million investment from JPMorgan Chase to expand small business lending in underserved communities and finance local affordable housing projects.” JPMorgan Chase “has increased its direct equity investments in Minority Depository Institutions and Community Development Financial Institutions to $100 million and has added 10 new institutions as recipients,” including the bank. The Journal said, “JPMorgan Chase’s latest round of direct equity investments more than doubles the $50 million it originally pledged to invest in MDIs and CDFIs...In total, JPMorgan Chase has pledged to commit $30 billion over the next five years to advancing racial equity and bridging the racial wealth gap.” The Journal explained, “MDIs and CDFIs play a vital role in generating economic growth by providing financial services to underrepresented demographics, particularly communities of color and low-income areas.”
SMBs Look For Advantage With Digital Marketplaces (10/12/2021)
PYMNTS (10/6) reported, “At the beginning of 2021, optimistic prognosticators said the U.S. would be out of the pandemic’s depths by the fall, but with vaccination rates slowed and the delta variant spreading across the country, only 24% of Main Street small and medium-sized businesses (SMBs) say their community is completely back to normal.” Kendrick Wong, co-founder and CEO of retail market intelligence platform Omnilytics, “said that going into the pandemic, a lot of apparel retailers, in particular, were underinvested in eCommerce, which left them scrambling to move online when the physical world shut down.”
Wages and Benefits
First-Time Claims For Jobless Benefits Fall To Post-Pandemic Low (10/26/2021)
The AP (10/21, Rugaber) reported that according to data from the Department of Labor released Thursday, the number of claims for first-time employment claims fell 6,000 to 290,000 last week, a “new low point since the pandemic erupted, evidence that layoffs are declining as companies hold onto workers.” Reuters (10/21, Mutikani) reported it was “the second straight week that claims remained below 300,000 as employers hold on to workers in the face of an acute labor shortage. Economists polled by Reuters had forecast 300,000 claims for the latest week.”
Fed Economist: Over 3M Americans Retired Early Due To Pandemic (10/26/2021)
Bloomberg (10/22, Tanzi, Sasso) reported that St. Louis Federal Reserve economist Miguel Faria-e-Castro estimates “more than 3 million Americans retired early because of the Covid-19 crisis,” which “equals to more than half of the workers still missing in the labor force from pre-pandemic levels.” However, Bloomberg added the new research “suggests that the boom in early retirements shows no sign of abating.”
>Economists Say Factors Behind Low Labor Force Participation Could Be Slow To Reverse (10/26/2021)
As Americans Leave Jobs At “Staggering Rates,” Unions Use Strikes To Benefit Those Who Stay (10/19/2021)
The Washington Post (10/17, Bogage) reported that while Americans are “leaving their jobs at staggering rates,” many are “choosing to dig in and fight.” The Post said that so far, “there have been strikes against 178 employers this year, according to a tracker by Cornell University’s School of Industrial Labor Relations,” while the Bureau of Labor Statistics, “which records only large work stoppages, has documented 12 strikes involving 1,000 or more workers so far this year. That’s considerably higher than 2020, when the pandemic took hold, but in line with significant strike activity recorded in 2019 and 2018.” In interviews with the Post, workers and labor leaders “said union members are angry with employers for failing to raise pay to match new profits and are disappointed by the lack of high-quality jobs,” and “frustrated that wage growth is not keeping pace with inflation.”
First-Time Jobless Claims Fall To Lowest Level Since March 2020 (10/19/2021)
Bloomberg (10/14, Shah) reported that according to Labor Department data, first-time claims for jobless benefits fell 36,000 last week to 293,000, the “lowest since March 2020, showing employers are hanging onto their workers in a tight labor market.”
First-Time Jobless Claims Down Significantly Last Week (10/12/2021)
Bloomberg (10/7, Pickert) reported that according to Department of Labor data released Thursday, first-time claims for new jobless benefits fell 38,000 last week to 326,000, “pointing to ongoing improvement in the labor market.” Economists surveyed by Bloomberg had expected claims to come in at 348,000. The AP (10/7, Wiseman) called it “another sign that the U.S. job market and economy continue their steady recovery from last year’s coronavirus recession.” Reuters (10/7, Mutikani) said last week’s decline was the largest since June. Claims “had increased for three straight weeks as California moved people to another program following the expiration of federal government-funded aid on Sept. 6 to maximize their access to unemployment benefits.”